http://www.europeanbusinessreview.com 41they don ́t fit into the established system,
while being considered an expensive
burden on the business. A few years
back, we have seen several major corpo-
rations open impressive innovation
labs in Silicon Valley to complement
or replace their in-house innovation
efforts. These labs (again) gathered staff
from tech-giants and in some cases also
respective industry experts to ensure
compliance and interoperability with
existing corporate structures. Being a
lot more difficult to supervise and keep
in touch with than in-house innovation
teams, only few of the innovation labs
were connected to the core business and
were able to drive major change.
Why innovate yourself?
It has been said many times before:
long-established companies are known to
be proficient when it comes to optimising
their core offering but perform poorly
as regards game-changing approaches.
Especially in industries where trans-
formative change isn ́t continuously
required, businesses should refrain from
transforming themselves too fast. In
fact, even when game-changing ideas are
sought for, these are unlikely to originate
in-house or in a corporate innovation
lab. Luckily, there is a better way, and it
is not even new. It is called procurement.
Organisations already effectively
delegate (or outsource) parts of their
business to specialists to either better
face volatility in demand, reduce costs or
streamline their operational footprint.
In sum, they procure activities that are
not considered core to their business –
a global industry worth estimated USD
2.8bn in 2018 and growing with double-
digits. Importantly, innovative solutions
can be and are already being sourced,
negotiated and purchased successfully
just as any other part of the business.
After all, procuring for innovation
means no more than hiring the best
available provider for a challenging
assignment in a structured and strictly
performance-oriented manner.
Very few business leaders are
aware of the fact that innovation
procurement has been practiced by the
public sector for over a decade already.
Launched by progressively thinking
EU agencies, it has enabled hospitals,
cities and other stakeholders to procure
innovative solutions with impressive
results. Assignments are being given
to both young and mature businesses
capable of delivering a solution tothe procured challenge, while being
managed according to strict schedules
and performance milestones typical for
the procurement sector. This helps not
only the leading organisation but disci-
plines the innovation suppliers more
than investors ever could.
For particularly complex challenges
where ideas may not yet be market-ready,
so-called “pre-commercial innovation
procurement” has been performing well
in Europe for years. From self-drivingIf innovation is not
at the core of yourbusiness model,
there is no reason to
treat it as if it were.
hospital beds to high-end supercom-
puters, ideas are being refined and put to
work in a structured partnership between
assigning bodies and innovators. We
now have a wealth of proof demon-
strating that innovation procurement
works and that what started as a
demand-driven public effort to make
Europe more competitive is ready to be
put to test by corporations.Innovation as a service
Expecting in-house innovation teams
to deliver breakthrough ideas for all
business and operations challenges is both
naïve and irresponsible. Unfortunately,
a widespread misconception across
industries facing performance pressure
remains that innovation must become a
part of their core skill set. If retained,
this misleading perspective will prevent
them from experiencing just how effec-
tively innovative ideas can be purchased
and tailored – a lesson that the aforemen-
tioned public organisations in Europe
have learnt over a decade ago.
Overall, letting go of the innovation
frenzy is as important as accepting that
innovative solutions can be managed
just like any other business task – with
a strict timeline, no disruption to core
operations and clear responsibilities
on both sides. The ultimate insight is:
if innovation is not at the core of your
businessmodel, there is no reason to
treatit asif it were.AbouttheAuthor
Claudio Cisullo is a Swiss-
based serial entrepreneur
and investor. He is the
founder and Chairman of
CC Trust, a family office
invested across the biotech, leisure,
pharmaceuticals, professional services,
real estate and technology sectors.
Among his most recent investment is
Chain IQ Group, a globally active
provider of procurement services.